Should the EU ETS be extended to road transport and heating fuels?

Michael Pollitt and Geoffroy G Dolphin

Cambridge Working Papers in Economics from Faculty of Economics, University of Cambridge

Abstract: This paper considers the current proposal to extend the EU ETS to cover CO2 emissions from the combustion of heating and road transport fuels. We argue that increased coverage of the EU ETS, together with a binding cap consistent with a net zero trajectory, would be a powerful dynamic incentive to efficient emissions reduction. In addition, it would complement standards-based policies currently enacted in these sectors in several ways. Distributional implications remain a serious challenge to such an extension but several mechanisms are available to alleviate them.

Keywords: climate policy; emissions trading; EU; net zero (search for similar items in EconPapers)
JEL-codes: Q52 Q54 Q58 (search for similar items in EconPapers)
Date: 2024-02-09
New Economics Papers: this item is included in nep-eec, nep-ene, nep-env, nep-reg and nep-tre
Note: mgp20
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Related works:
Working Paper: Should the EU ETS be extended to road transport and heating fuels? (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:cam:camdae:2152

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